The factors that are keeping the global equity markets within a tight range are also keeping the commodity markets within a range. The price of crude oil has reached the upper end of its price range and it is finding the ceiling of US $84 US a barrel very difficult to break. The prices of base metals could also witness significant corrections once the asset bubbles generated with excess liquidity burst on account of either sovereign defaults or undergo deflation due to tighter monetary policies adopted by emerging economies vexed with double digit inflation.
The price of natural gas is expected to remain weak and range bound in view of increasing austerity measures in Europe and warmer weather in the northern hemisphere in the ensuing weeks and months.The prices of agricultural commodities are expected to remain in a range with a positive bias as the monetary policy measures being implemented by emerging economies could slow down the pace of price rise in edible commodities. Better harvest from the winter crop and a normal monsoon in India could ease the pressure on the prices of many edible commodities.